About the Inventory Turnover Calculator
What is the Inventory Turnover Calculator?
Inventory turnover shows how many times a business sells and replaces its stock in a year. Higher turnover means less money locked up in inventory and a lower risk of obsolete stock.
Enter cost of goods sold and the opening and closing inventory to get the turnover ratio and the average number of days stock is held.
How to use the Inventory Turnover Calculator
- Cost of Goods Sold for the Year (₹) (sample: 60,00,000)
- Opening Inventory (₹) (sample: 9,00,000)
- Closing Inventory (₹) (sample: 11,00,000)
- Press Calculate Inventory Turnover (results also refresh as you type). The result card shows the Inventory Turnover Ratio, along with Days inventory outstanding, Average inventory and Stock held in months of sales.
Formula used
Inventory turnover = COGS ÷ Average inventory
- Average inventory = (opening + closing inventory) ÷ 2
- Days inventory outstanding = 365 ÷ inventory turnover
Use COGS rather than sales, because inventory is valued at cost.
Worked example
These are the sample values already filled in the calculator above, and the result it returns for them:
| Input | Sample value |
|---|---|
| Cost of Goods Sold for the Year (₹) | 60,00,000 |
| Opening Inventory (₹) | 9,00,000 |
| Closing Inventory (₹) | 11,00,000 |
| Result | Value |
|---|---|
| Inventory Turnover Ratio | 6× |
| Days inventory outstanding | 60.8 days |
| Average inventory | ₹10,00,000 |
| Stock held in months of sales | 2 |
Tips for using the Inventory Turnover Calculator
- Compare turnover with your industry: grocery turns stock 12–20 times a year, jewellery 1–2 times.
- Identify slow-moving items; a few can drag the average down.